A holding company may provide financial assistance, by lending money, to a person to acquire shares in that holding company.
Note that the above can happen only if the holding company must not be majorly owned by another company, or if the holding company is not a public company.
Before the company can proceed with giving financial assistance, the board of directors must pass a resolution stating all of the following:
- The company should give financial assistance.
- The terms and conditions of the financial assistance are fair and reasonable to the company.
- The grounds for providing such financial assistance.
Speak to us about rendering financial assistance.